Big Tech Faces New Bills on Liability and Competition in U.S

(Bloomberg) -- The biggest U.S. tech companies would face new constraints under two bills announced Thursday after a month of revelations from a Facebook Inc. whistle-blower sparked fresh calls to rein in an industry that has largely escaped regulation so far. 

A measure from Energy and Commerce Chair Frank Pallone and other leading House Democrats would revoke legal liability protections for platforms that use algorithms to spread harmful information, arguing that companies should be held responsible for how their technology disseminates content. 

“Social media platforms like Facebook continue to actively amplify content that endangers our families, promotes conspiracy theories, and incites extremism to generate more clicks and ad dollars,” Pallone of New Jersey said in a statement. “Designing personalized algorithms that promote extremism, disinformation and harmful content is a conscious choice, and platforms should have to answer for it.”

The other bill is an antitrust measure from a bipartisan group of senators that would prevent the biggest U.S. technology giants like Amazon.com Inc. and Apple Inc. from giving an advantage to their own products over those of competitors. 

That proposal, cosponsored by Minnesota Democrat Amy Klobuchar and Iowa Republican Chuck Grassley, would prohibit the companies from using data to hurt competition, stacking search results in their favor or restricting the way other services use their platforms. The bill matches a House proposal that tech groups have warned would risk user security and make it harder to use services that consumers enjoy. 

“America has a monopoly problem, and we have these dominant tech companies that for too long have said ‘trust us,’” Klobuchar, who leads the Senate Judiciary antitrust subcommittee, said in a telephone interview on Wednesday. “There has been a major assault on competition, and our country is built on open markets and fair competition.”

A strong roster of cosponsors, including the chair and top Republican on the Senate Judiciary Committee, which would first consider the legislation, increases its chances of eventually getting a vote on the Senate floor. The proposal roughly mirrors a bill by Representative David Cicilline, a Rhode Island Democrat, that was advanced by the House Judiciary Committee in June but hasn’t yet received a vote in the full House. 

The Senate bill reflects months of negotiations between Klobuchar, Grassley and their staffs to assuage concerns and build broader support in both parties. While the measure was in the works long before the whistle-blower allegations against Facebook, Klobuchar said the past month’s revelations have served as a “catalyst for action” in Congress.

There have been several proposed avenues to regulate the tech industry, and lawmakers of both parties are vowing to use this momentum to act on them. Some of the bills focus on strengthening privacy rules or updating protections for children online. Others, like Pallone’s new House bill, would chip away at the Section 230 legal shield provided by a 1996 law. 

Tech companies “have been lobbying against this, and that’s why I was so pleased that my colleagues stood up to it,” Klobuchar said of her antitrust bill, adding that the companies’ lobbyists have a “take no prisoners” approach to opposing legislation they disagree with. 

Within hours of the Senate bill’s announcement, tech groups renewed warnings that such antitrust measures would destroy popular services like Google Maps and Amazon Basics. Adam Kovacevich, head of left-leaning tech group Chamber of Progress, said the bill “takes a hammer to tech products that consumers love.”

Pro-competition groups, on the other hand, cheered the proposal. Sarah Miller, head of the American Economic Liberties Project, highlighted a bipartisan willingness in Congress to “turn the page on a failed era of antitrust enforcement.”

“The Senate must continue to reassert its power over the handful of men whose corporations undermine economic dynamism, eviscerate the free press, and threaten our democracy,” Miller said. “The Senate must embrace breaking up Big Tech to re-introduce the discipline of market-based competition to complement regulatory efforts.”

The Senate bill, like the House version of the antitrust measure, would apply to Apple, Amazon, Facebook and Alphabet Inc.’s Google. The Senate proposal has the same criteria for a platform’s monthly users but a slightly lower threshold for market capitalization -- $550 billion instead of the $600 billion in the House bill -- and small changes to the definition of a critical trading partner. 

Klobuchar said her bill also eliminates a provision from the House version that would have allowed conduct that “increases consumer welfare,” because the senators believed that to be too big of a loophole for companies. The Senate version also streamlines some of the penalties and tweaks some language to “ensure that platforms can improve their products without fear of violating the law,” Klobuchar said. 

The bill from Cicilline, who leads the House Judiciary antitrust subcommittee, and Representative Lance Gooden, a Texas Republican, was part of a package of six bipartisan bills put forth by the House Judiciary Committee. Two of those bills already have Senate companions, and Senator Tom Cotton, an Arkansas Republican, is working on another proposal similar to the House bill to limit mergers and acquisitions by covered platforms.